Growth Rate's Better, but Don't Get Excited: Economist

The U.S. economy picked up some steam in the third quarter. The Commerce Department reported that GDP grew at a 2% annualized rate from July to September. That's an improvement from the sluggish 1.3% pace in the second quarter but nothing to get excited about, says David Rosenberg, chief economist and strategist at Gluskin Sheff.

The higher growth in the third quarter was due to increased government spending, which is unsustainable, he tells The Daily Ticker. Factoring that out means growth was 1.3% in the private sector, virtually unchanged from the previous quarter, says Rosenberg.

"GDP is all about spending," says Rosenberg. "Consumption is up 2% but real disposable personal income is growing at a 0.8% annual rate." This could mean that consumer consumption will slow and GDP growth will decline.